What is the Purpose of Incorporating a Business in Massachusetts?
In terms of the location of incorporation, and at the risk of sounding like I am joking, Massachusetts is as good a place to incorporate your business as anywhere else with some exceptions. Although there are times when a business may choose to incorporate in another state, Delaware for example to take advantage of that State’s business-friendly policy and courts, there is very little strategic advantage for the average startup or business seeking to change its business structure to that of a corporation.
What is the Process of Incorporating a Business in Massachusetts?
Step 1 – Choosing a Name for the Business
While certainly not the most important step in the incorporation process, the importance of a name cannot be understated. The name of your business is the first step in branding your business, and the effect that the name has on those who encounter it should be considered prior to settling down on the name. Additionally, the name will need to be checked through the Massachusetts Secretary of State’s office to ensure that no duplicate name exists prior to settling on the name for your Massachusetts business.
Step 2 – Form and File Your Articles of Incorporation
The articles of incorporation will be filed by our office on your behalf or, if you choose, by yourself with the Massachusetts Secretary State’s Office. These articles explain, to the State, the business’s purpose, type of stock issued, and other demographic-like details of the corporation.
Step 3 – Choice of Registered Agent
A registered agent is a person or business that you choose to be the recipient of service of process and other documents that must be filed to satisfy notice requirements of various Massachusetts laws, statutes or regulation. This choice of registered agent can be as simple as the founder of the corporation, our office, or any other person or company that you wish to use for this purpose.
Step 4 – Draft Bylaws
Your corporation will need to have bylaws. Bylaws are rules which spell out exactly how certain aspects of the business are handled. Without bylaws, a corporation faces serious liability risk because officers, owners and other’s involved in the corporation may exploit the lack of clearly define rules to take advantage of the lack of clarity in the corporation. Clear rules, that is, clear bylaws can achieve clearly defined roles and lines that executives, owners and others muse operate within.
Step 6 – Hold First Meetings
Meetings of the incorporator of the business and of the board of the directors must occur. Such meetings serve two critical functions within a corporation. First, these meetings establish for those involved in the corporation a serious tone, one which inform all involved of the way that business will proceed from that point forward. Second, these meetings function as official documents which satisfy legal requirements for a corporation in Massachusetts.
Our Office Can Help
I often tell clients that it is possible to incorporate by yourself, and it certainly is possible to do this. One can find multiple free of very inexpensive online sources that can be used to form a business, or draft legal documents. The problem with these sources is that the products offered may not be sufficiently specific to Massachusetts law, and worse, the individual products offered may not adequately consider the relationship to on another. For example, a shareholder’s agreement must be integrated with the provisions in bylaws. I am highly suspect of the ability of an online platform to draft bylaws that are tailored to consider the provisions of a shareholder’s agreement. The net result of such a mismatch between these two specific documents is that they may not be in agreement, which if true, would be the basis for confusion and legal argument in the future.
Our law office, located on the North Shore of Massachusetts and also able to handle most of these issues via Zoom or other platforms, will take the time to understand the unique circumstances of your current business or startup and provide you with a solution that is economically viable and tailored to your needs. Contact us at 978-273-8337 for more information.
DISCLAIMER: The information provided in the pages and posts of this website are for general informational purposes only. The information presented on this site is not legal advice, and no attorney-client relationship is formed by the use of this site.